Bank of Ireland tracker mortgage % increase

disposalist

Doh. I really really will stop after this one, but I just want to advise anyone interested in the issue to Google around, because there are some interesting articles around the issue like: -

"Bank of Ireland shares rise as 2012 results contain no nasty surprises" in the Irish Times.

"Bank of Ireland forced to put customers back on trackers" from Irish Independant.

"Bank of Ireland hails new momentum" in FT.com

"Bank of Ireland says mortgage arrears stabilising" (!) at Reuters

And I noticed this at the current BoI UK site: -

"What is a Standard Variable Rate (SVR)?
Our SVR is a rate set by the Bank of Ireland Group and may go up or down. While these changes are generally determined by what happens with the Bank of England Base Rate, it doesn't always move with it and can also be changed for other monetary reasons...

What is a tracker rate?
If you're on a tracker rate, the rate you pay will be equivalent to the Bank of England Base Rate plus a differential amount. As the Bank of England Base rate can go up or down, the rate you pay could also increase or decrease."

So they are at pains to state that the SVR may vary with "other monetary reasons" but the tracker decription has no such 'clarity'... Awesome.

motch

I'm thinking of remortgaging soon with a 5 year fix, Post Office, Chelsea, HSBC etc, could be affected in the future I guess.

Hope it works out ok for you disposalist.

disposalist

motch wrote: »

I'm thinking of remortgaging soon with a 5 year fix, Post Office, Chelsea, HSBC etc, could be affected in the future I guess.

Hope it works out ok for you disposalist.

Promised I wouldn't past any more, but I have to respond to warn you... Eek! Post Office mortgages *are* Bank of Ireland! Look out!

As in that blog article I cut-and-pasted: -

"mortgage brokers are warning homebuyers to think hard before taking out a Post Office mortgage. Bank of Ireland has shot the Post Office's reputation "to smithereens""

In general, though, look out for the 'special conditions' clauses and make sure you read any extra 'conditions' documents that they refer to but don't stress (or even include?)

Good luck to you too!

noddynoo

It is in the small print end of story. It does seem harsh but the other banks will be following suit soon

Hobby

I am in the same position as most on here. I have a BTL mortgage from Jan 2004. Initially Fixed for five years then reverted to BR Tracker automatically. I have received the dreaded letter and gone through my contract with a fine tooth comb. I have kept all the initial paperwork from Bristol and West and although it mentions in the loan offer document Residential Mortgage Conditions , I was never supplied with the Residential Mortgage Conditions. It appears to me they are using these conditions to now impose the special circumstances increase. I notice that quite a few threads from others , state that they too never received this form/booklet. As its of such critical importance to the loan offer then surely anyone who did not get it has a strong legal case. I have sent the following letter to BOI. I appreciate its long winded and probably quite boring , but anyone who wants to take anything from it , is more than welcome.........
LETTER OF COMPLAINT
Thank you for your letter dated 25th February 2013 concerning the change to the interest rate on my mortgage account. As far as I am concerned your proposed increase in unlawful and falls outside the agreement we both entered into upon commencement of the mortgage. In fact I will go as far to say that, in the event of a small print term that allows you to alter the differential at your whim; I may have been mis-sold the base rate tracker mortgage that now applies. I have in my possession all the original documentation relating to this mortgage including offer of loan and all the terms and all related pamphlets. In front of me the Bristol and West Buy-to-Let Guide which accompanied my application/offer as well as the actual formal original mortgage offer dated 30th January 2004. This literature forms part of the selling of the mortgage and is clearly important to any decision making process. It is a very detailed offer of loan and pamphlet. In the literature there is a page dedicated to the various mortgages you offer; the page is headed 'What type of mortgage can I have'. In this it states 'Buy to let mortgages are currently available as Base Rate Trackers, Fixed Rates and Easyflex'. Although in 2004 my mortgage was a fixed rate I refer now to the same pamphlet form that was provided to me in 2004 as I have been provided with no other guide form. The terms of my original Fixed Rate mortgage state on Page 7 that after the Fixed rate promotional period has ended, the mortgage will become a base rate tracker , with a differential of 1.75% above base rate unless we change the differential under 6(m) of our Residential Mortgage Condition. which is I why I refer to the base rate tracker information in the guide pamphlet There are detailed explanations for each of the various mortgages and I quote the statement in your literature 'Base Rate Tracker - For reassurance that your monthly repayments track the movements in Bank of England interest rates (BRT), choose one of our Buy-to-Let Tracker mortgages'. Note that nowhere does it say 'For reassurance that your monthly repayments track the movements in bank of England interest rates, unless the Bristol and West decide otherwise, and should the Bristol and West decide otherwise then your actual rate could increase as much as over 100%, so
choose one of our Buy-to-Let tracker mortgages’. I am in possession of the original offer of loan, which was a Fixed Rate mortgage offer set at 5.75% Fixed until the 31.3.2009. For the sake of clarity I have read this document in its entirety and it does not refer to any special circumstances that allow you to ignore the base rate tracker. The only mention of any special base rate tracker conditions are on Page 7 of the loan offer (which I mentioned above when referring to page 7.) It also makes reference to Base Rate Tracker Conditions on Page 6 of the loan offer. There are some conditions that are irrelevant however Section 10 b states - When we are charging you interest at a tracker rate : (i) unless we change the differential under condition 6(m) of our Residential Mortgage Conditions, we will only change the tracker if base rate changes. (ii) if base rate changes then (unless condition 6(1) of our Residential Mortgage condition applies) we will always change the tracker rate by the same amount within 30 days (iii) we will not change the differential (if any) which applies during any promotional period, we may change the differential (if any) under condition 6 (m) of our Residential Mortgage Conditions. However, during the guarantee period, we will only change the differential if either of the reasons stated in condition 6 (p) of our Residential Mortgage Conditions applies. I was never given any Residential Mortgage Conditions with the loan offer. I have 7 pages of loan offer listed pages 1-7 on the front and nowhere in the loan offer does it explain what the Residential Mortgage Conditions are. I have never seen or signed to accept them. I assume that when you refer to special circumstances in your letter to me dated 25th Feb 2013 detailing your proposed interest increase, its these Residential Mortgage Conditions, that you refer to. If so, it would have helped if you simply say so, rather than referring to some special circumstances. If you make reference to them in a legal contract then you have to detail them. I have never been provided with them. They formed no part of the loan offer. So it is quite wrong for you to now state that you wish for something I have never seen or signed to accept to apply. It will not be acceptable for you to argue that as you referred to them in your offer of loan then I should have asked to see them. It is for the Bristol and West to ensure that everything is transparent, explained, unambiguous and clear. I accepted this mortgage product because of what I had been told and what I had read. If you are now saying that there is a special small print clause in the terms and conditions headed 'under certain circumstances and Bristol and West can totally scrap the main terms of the mortgage agreement and charge whatever interest rate they deem appropriate then this should have been highlighted in the pamphlet I mentioned earlier. It does not and had it done so I would never have agreed to it. I took out this particular mortgage in good faith and would certainly never have done so if the true facts were known to me. It’s of such critical importance that he has to be detailed to me somewhere. Such a material small print clause is of such importance that it must be detailed in any illustration and advertising and certainly in any loan offer. as it can have such a dramatic effect on the interest
charged and one’s ability to meet those payments and would have needed to be clearly explained. It appears to me that as the Bank of England base rate is so low, and may even be lowered to 0%, you have not been getting as much money from me as you would have preferred and are now changing the goal posts to suit yourselves. Had the Bank of England base rate increased to 15% and I had written to you pleading that my judgement in accepting the mortgage was not so wise could I have a lower rate, you can be sure you would have told me in no uncertain terms to comply with the terms of my Base Rate Tracker. You would have shown me absolute no sympathy whatsoever. Now your poor judgement is impacting the Banks profits then you see fit to change the agree Ts & Cs - this is not right or lawful and I object to it. I state above that I may have been mis-sold this mortgage. However notwithstanding this mis-selling, I also detail factors below which are cause for complaint and ask you to take these into consideration when reviewing your proposed mortgage interest increase. It is ridiculous that not only are you proposing to increase my monthly charge you are in fact increasing it by over 100%. Where does it say anywhere in the mortgage offer or literature that should there be an increase it would be totally at your pleasure. In the event of a Bank of England base rate increase then the increases are usually in increments of one half a percent, so to increase it by 2.74% in one go is outrageous and I, and other Bank of Ireland customers in my situation, simply cannot afford it. I have made a call to your helpline and it appears that the reason you are making a change to our agreements is that your bank has to recapitalise, due to EU banking rules. Please can you confirm that this is the case, as it appears that this new EU legislation, which was not in force at the time of our mortgage agreement, is forcing me to suffer a financial burden that is grossly out of proportion to the rate at which I pay interest charges on now. This is not acceptable and if the new EU rules have been created because of the inability of banks to manage their finances in an orderly way then your proposed increase in interest rates is not lawful. Quite clearly it will impact me, as well as other BoI customers, and as I have told you I cannot afford it. You will no doubt be aware that once a short hold tenancy agreement has been signed by a tenant, the landlord cannot impose a rental increase until the end of the agreement term and only then if it’s reasonable or its subject to appeal. So in effect if you increase your mortgage rates by a large amount I am unable to cover the increase through no fault or bad planning on my part. Your massive increase from 2.25% to 4.99% is simply excessive and nowhere else in any mortgage or financial arrangement would there be increases of over 100% in one go. Once you have recapitalised will you then be reverting back to the agreed base rate tracker? If so who will police this, or do I rely on your honesty and integrity here? I will fight this increase as it’s blatantly a financial abuse and to this end I have written to the FSA pointing out your and my position. You say in your letter the FSA are aware of the increase. Did you mention to them that you may have mis-sold the original mortgage to your customers like me? I doubt that for one moment. Did you mention to them that you now seek the small print in relation to Residential Mortgage Conditions, but failed to provide me with any information on what these conditions were? I look forward to asking them. Should your increase continue I will also be making a complaint to the Financial Ombudsman Service.
If you still intend on administering your proposed increase, I ask that you at least to suspend it until the FSA have had the opportunity to make a full informed decision on it, taking into account all factors including the concerns I state in this letter. On a final note please can you inform me what difference this change will make to your capital reserves. Also could you let me know whether this applies to Bristol and West customers only or all Bank of Ireland customers and precisely what you propose to do once you have recapitalised? Will your intention to be to revert back to the base rate tracker as it is now? And how long do you propose to take to recapitalise? I have an impeccable credit rating with your Bank and have never even had one day’s late payment in relation to this mortgage. It appears that this exemplary customer history counts for nothing with the BOI

socrates

Why do these banks keep mentioning The FSA when BTL mortgages are outside the remit of The FSA - and will be of no assistance to you - sold or missold?

JimmyTheWig

There seems to be an awful lot of BTL mortgages affected here. Just out of interest, is there a reason that this product attracted BTLers?

Graham_Devon

disposalist wrote: »

For me, even after all the to-ing and fro-ing of opinions here, there is a point that still makes this a fight worth pursuing, I think: -

Even if (a big if) customers were given all the related documents and and understood all the legal implications and banking conditions that might lead to this situation, there is still a requirement for BoI to Treat Customers Fairly.

Suddenly doubling tracker payments is not a fair act, no matter what the justification.

BoI claim they need the money because of the curent banking-created banking problems. It's also because of banking problems that the Treating Customers Fairly requirements came about.

Surely, they shouldn't be able to have it both ways?

I'm not sure there's a case for being mis-sold or mis-lead, but there is one for being treated unfairly? I'm hoping BoI can be made to pursue this in a more fair way: -

- Delay the action for more time so people have adequate time to move elsewhere or, for the many (majority?) that can't, prepare for the effects of the cost increase.
- Introduce the rise on a gradual scale over perhaps a year so the effect is not so potentially devastating.
- land at a rate that is more competitive or offer a range of new products as if new customers.

Another thing that has surprised me over this issue is the lack of concern by others. It's clear there no sympathy for "landlord" as an occupation, but this isn't just BTL landlords being ruined; 'normal' folks already hard-pushed these days are going to lose their homes from a sudden doubling of mortgage payments.

Even if there's no sympathy for those effected, isn't everyone else worried that once BoI have gotten away with this, then all banks will have a green light to get their legal teams looking for ways to screw their customers?

I have sympathy, but I don't know how those who took mortgages 9 years ago, can't have enough equity or paid off enough of the mortgage to be able to simply mortgage like everyone else.

In my mind, if they are residential and will lose the house over this, without looking at the emotional aspect of this, they would have lost the house if rates rose to 2.5% anyway.

Low rates don't really help a situation if you are clining on with your fingernails. And those people you refer to will fall into that camp.

I.e. it's not really the banks fault here. The bank raising rates is merely what tipped them over the edge. Could have been a multitude of other things.

plimsolls_on

Thrugelmir wrote: »

Typical sockie behaviour.

Funny how "Re-Wired" thanks all your posts but doesn't post anything themselves

Graham_Devon

JimmyTheWig wrote: »

There seems to be an awful lot of BTL mortgages affected here. Just out of interest, is there a reason that this product attracted BTLers?

The BBC stated that a lot of these mortgages were self certification mortgages.

I don't know what "a lot" means, neither do I have any evidence other than what the BBC stated on the business section of their website.

If true, I guess it gives an indication of why A) it was so popular amongst landlords and why so many now find themselves in trouble.